Royal Bank Of Canada Reaffirms "Sector Perform" Rating for Paychex (NASDAQ:PAYX)

Key Points

• Royal Bank of Canada reaffirmed its “sector perform” rating on Paychex and set a $130 price target, implying roughly 26% upside. Analysts overall maintain a consensus “hold” rating with an average target of $129.82.
• Paychex reported quarterly earnings of $1.34 per share, topping estimates, while revenue rose 5.9% year over year to $1.63 billion. PEO and Insurance Solutions revenue increased 12%, and the company raised that segment’s full-year growth outlook to 7%–8%.
• Shares recently traded at $103.12, below the RBC target, while insiders sold shares and institutional investors owned 83.47% of the company. Paychex also introduced WISE Hire, an AI-powered recruiting product intended to expand its workforce-management platform.

Paychex (NASDAQ:PAYX - Get Free Report)'s stock had its "sector perform" rating reissued by equities research analysts at Royal Bank Of Canada in a report released on Thursday, Benzinga reports. They presently have a $130.00 target price on the business services provider's stock. Royal Bank Of Canada's price objective suggests a potential upside of 26.07% from the company's current price.

Several other analysts also recently commented on PAYX. Wells Fargo & Company upped their price objective on Paychex from $95.00 to $111.00 and gave the company an "underweight" rating in a research note on Wednesday, September 9th. Bank of America cut their target price on Paychex from $450.00 to $225.00 in a research note on Wednesday, July 15th. Morgan Stanley increased their target price on Paychex from $107.00 to $109.00 and gave the stock an "equal weight" rating in a research note on Tuesday, June 30th. TD Cowen increased their target price on Paychex from $98.00 to $117.00 and gave the stock a "hold" rating in a research note on Friday, September 11th. Finally, Raymond James Financial raised Paychex from a "market perform" rating to an "outperform" rating and set a $210.00 target price for the company in a research note on Thursday, July 16th. One investment analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating, thirteen have given a Hold rating and two have given a Sell rating to the company. According to MarketBeat.com, the stock has a consensus rating of "Hold" and an average target price of $129.82.

Paychex Stock Performance

PAYX traded down $1.38 on Thursday, hitting $103.12. 808,706 shares of the company traded hands, compared to its average volume of 3,494,996. The company has a 50 day moving average of $119.04 and a 200-day moving average of $104.09. The company has a quick ratio of 1.26, a current ratio of 1.26 and a debt-to-equity ratio of 1.22. The stock has a market capitalization of $36.68 billion, a PE ratio of 21.15, a PEG ratio of 2.40 and a beta of 0.82. Paychex has a 12-month low of $85.45 and a 12-month high of $130.32.

Paychex (NASDAQ:PAYX - Get Free Report) last posted its quarterly earnings data on Wednesday, September 23rd. The business services provider reported $1.34 EPS for the quarter, beating the consensus estimate of $1.32 by $0.02. The firm had revenue of $1.63 billion during the quarter, compared to the consensus estimate of $1.63 billion. Paychex had a return on equity of 50.90% and a net margin of 27.03%.The firm's revenue was up 5.9% compared to the same quarter last year. During the same period in the prior year, the business earned $1.22 EPS. Paychex has set its FY 2027 guidance at 5.896-6.006 EPS. Sell-side analysts anticipate that Paychex will post 5.96 earnings per share for the current year.

Insider Activity at Paychex

In related news, CFO Robert L. Schrader sold 2,600 shares of the firm's stock in a transaction that occurred on Monday, July 20th. The stock was sold at an average price of $115.09, for a total value of $299,234.00. Following the completion of the transaction, the chief financial officer directly owned 18,547 shares of the company's stock, valued at $2,134,574.23. This trade represents a 12.29% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Joseph M. Tucci sold 3,907 shares of the firm's stock in a transaction that occurred on Friday, June 26th. The shares were sold at an average price of $98.25, for a total value of $383,862.75. Following the completion of the transaction, the director directly owned 67,364 shares of the company's stock, valued at $6,618,513. The trade was a 5.48% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Company insiders own 0.60% of the company's stock.

Hedge Funds Weigh In On Paychex

Hedge funds have recently bought and sold shares of the company. State Street Corp grew its holdings in Paychex by 2.6% during the 2nd quarter. State Street Corp now owns 14,411,341 shares of the business services provider's stock valued at $1,417,067,000 after buying an additional 361,713 shares during the last quarter. Talon Private Wealth LLC acquired a new stake in Paychex during the 2nd quarter valued at $220,000. Rench Wealth Management Inc. grew its holdings in Paychex by 1.2% during the 2nd quarter. Rench Wealth Management Inc. now owns 56,948 shares of the business services provider's stock valued at $5,600,000 after buying an additional 650 shares during the last quarter. Cidel Asset Management Inc. grew its holdings in Paychex by 15.2% during the 2nd quarter. Cidel Asset Management Inc. now owns 2,529 shares of the business services provider's stock valued at $249,000 after buying an additional 333 shares during the last quarter. Finally, Pinnacle Wealth Management Advisory Group LLC grew its holdings in Paychex by 19.5% during the 2nd quarter. Pinnacle Wealth Management Advisory Group LLC now owns 13,720 shares of the business services provider's stock valued at $1,349,000 after buying an additional 2,238 shares during the last quarter. 83.47% of the stock is owned by hedge funds and other institutional investors.

Trending Headlines about Paychex

Here are the key news stories impacting Paychex this week:

• Positive Sentiment: Paychex reported fiscal Q1 adjusted earnings of $1.34 per share, above the $1.32–$1.33 analyst consensus, while revenue increased 5.9% year over year to $1.63 billion, in line with expectations. Operating margin expanded to 38.0% from 35.2%. Paychex Reports First Quarter Fiscal 2027 Results
• Positive Sentiment: PEO and Insurance Solutions revenue rose 12% to $367.6 million, prompting Paychex to raise its full-year growth outlook for that segment to 7%–8%, from 6%–7%.
• Positive Sentiment: JPMorgan upgraded PAYX from “underweight” to “neutral” and assigned a $115 price target, suggesting potential upside from the stock’s recent level. JPMorgan upgrades Paychex
• Positive Sentiment: The company introduced WISE Hire, an agentic AI recruiting product designed to automate candidate sourcing, matching and workflow management. The offering could support longer-term cross-selling and platform expansion. Paychex Introduces WISE Hire

About Paychex

Paychex, Inc is a provider of payroll, human resources, and workforce management solutions for businesses of varying sizes. Its offerings include payroll processing, tax administration, time and attendance tracking, employee benefits administration, retirement services, workers' compensation and business insurance, recruiting, and compliance support.

The company also provides professional employer organization services, helping businesses manage employment administration and human resources through an integrated platform.